Stocks: Wednesday's review

Most Asia-Pacific stocks rose as Japan’s machinery orders increased more than economists expected and South Korea’s unemployment rate fell.
Nikkei 8,587.84 +51.12 +0.60%
Hang Seng 19,026.52 +153.96 +0.82%
S&P/ASX  4,063.79 -9.09 -0.22%
Shanghai Composite 2,318.92 +29.13 +1.27%
Shares of Hitachi Ltd., which gets about one-third of sales from industrial machinery, climbed 2.4%.
Shares of Samsung Electronics Co., the world’s largest maker of mobile phones, rose 1.3%.
Shares Esprit Holdings Ltd. tumbled 21% before share trading was suspended after the clothier’s chief executive officer quit.

European stocks declined as borrowing costs increased at debt auctions in Germany and Italy and as Sweden’s SKF AB reported weakening demand for its products in the second quarter.
Germany sold 4.04 billion euros ($5.08 billion) of 10-year bunds today at an average yield of 1.52%, up from a rate of 1.47% at the last auction on May 16. Investors bid for 5.81 billion euros of the bunds, above the 5 billion-euro maximum sales target for the auction, the Bundesbank said.
In Italy, borrowing costs surged at the sale of 6.5 billion euros of bills. The Rome-based Treasury sold the one-year securities at 3.972%, 1.6%age points more than the 2.34% at the previous auction on May 11. Investors bid for 1.73 times the amount offered, down from 1.79 times last month.
National benchmark indexes fell in 11 of the 18 markets in western Europe. France’s CAC 40 lost 0.6%, the U.K.’s FTSE 100 rose 0.2% and Germany’s DAX fell 0.1%. Spain’s IBEX 35 rose 1.4% as shares of Inditex SA (ITX) surged to a record.
SKF tumbled 7.3% to 133.20 kronor in Stockholm, its biggest decline since August, after the company reported “slightly lower” demand for its products and services in the second quarter than in the same period a year earlier.
Renault led a selloff by carmakers, falling 4.2% to 30.98 euros as Carlos Ghosn, chief executive officer of Renault and Nissan Motor Co., forecast “three to four more years of stagnation” in Europe’s auto industry, according to a Reuters report.

U.S. stocks slid, after yesterday’s gain, as retail sales fell and concern about Europe’s debt crisis grew amid higher borrowing costs in Italy and Germany.
Equities fell as retail sales dropped in May for a second month, as limited job and income gains hold back consumers. Euro-area industrial production declined for a second month in April, led by a drop in Germany, adding to signs of a deepening economic slump. The Group of 20 nations meeting in Mexico next week probably won’t announce significant progress on Europe’s debt crisis, a U.S. official said.
Investors also watched the latest developments ahead of Greece’s elections on June 17. Alexis Tsipras, whose Syriza party in Greece is vying for first place in pre-election polls, said he expects the European Union will do all it can to keep the nation in the euro even if he wins elections and carries out his promise to repeal the austerity measures required to receive emergency loans.
The S&P 500 briefly rose as banks rallied. JPMorgan (JPM) jumped 1.6% to $34.30 as Chief Executive Officer Jamie Dimon testified about his bank’s $2 billion trading loss. He said a switch to a new risk model in the first quarter may have helped fuel the loss, and the bank has shifted back to the old system.
The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 1.5%. Home Depot (HD), the largest U.S. home- improvement retailer, lost 2.4% to $50.97. Caterpillar (CAT), the world’s largest maker of construction equipment, dropped 2% to $85.29. DuPont, a chemicals producer, fell 1.6% to $49.11.
Dell rallied 2.6% to $12.28. The quarterly payout of 8 cents a share will begin in the period that ends in October. The dividend’s yield would be 2.7%, based on the stock’s closing price yesterday. The company will focus on data-center gear as well as computing software and services while seeking to cut costs by more than $2 billion over the next three years.